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Paul Smith, Partner

Paul Smith, Partner

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Paul Smith, Partner

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  1. Eversheds Consulting World class management services for in-house legal teams Paul Smith, Partner

  2. Eversheds LLP – Eversheds Consulting • One of the largest full service law firms in the world with over 4,326 people including more than 560 partners and almost 2,500 legal advisers • 46 offices in major cities across Europe, the Middle East, Africa and Asia • Relationship lawyers – pioneers of partnering in thelegal market • Providing control over costs - championing the cause closest to clients’ hearts. Practising proactive legal and risk management: prevention not cure

  3. Eversheds LLP – Eversheds Consulting • Eversheds Consulting – A team of lawyers, certified project managers, auditors, IT and marketing specialists which delivers tailor made solutions to legal departments • Drivers of change – experience of outsourcing and off-shoring

  4. Cost centre to profit centre Re-aligning your legal team to achieve success • Today’s environment for Legal Departments: • Budgetary pressures • Drive to achieve more for less • Search for optimum effectiveness • Focus on added value • Outsourcing pressures • Showing the value of internal teams With the above in mind, this presentation can help move your teams move from a cost centre to a profit centre

  5. Cost centre to profit centre Steps to success – giving you the tools • Analyse the effectiveness of your internal team • Reducing external costs • Working efficiently through project management • Developing cultural change • Integration of legal and business units • Identifying revenue streams • Profitable legal department

  6. Your legal team Re-aligning to achieve success • Review of internal department • Process mapping • Focused KPI’s linked to objectives/strategy for the team • Benchmarking • Clear management information relatingto financial performance • Monthly reporting on KPI, strategy and legal spend

  7. Our processes

  8. Legal Work – Cost/Risk/Quality Matrix The starting point

  9. ImprovedInputs fromthe business Process analysis RECOMMENDATIONS A gatekeeping process is necessary to keep a check and balance on the inputs from the business, which drive the negotiation process. Introducing this new step in the process and ensuring its implementation will drive efficiencies throughout the rest of the process by reducing the level of rework and administrative burden placed on the negotiators by inaccurate and incomplete information. No Is inforeceived accurate & complete? Gatekeeping Yes Accurate and full information Reduction ofadmin burden and rework Negotiatorsreceive fullaccurateinformation

  10. Process maps Incomplete and inaccurate information received by legal team Currently done by negotiators. Transfer responsibility to admin team? Delays in starting and considerable rework required due to missing or incomplete documentation No unique identifier for cases transferred between systems

  11. Process maps The team has automated much of this workflow to produce TMA within 2 working days Missing a step for the allocation process Missing a ‘gatekeeping’ step which checks documentation is correct We recommend that this task is done by the admin team

  12. Benchmarking CURRENT PROCESS Cumulative mean percent of agreements executed by given time buckets* Comparison of negotiation times between 2004 and 2006 Surveys. Median percent by time bucket* *Source: International Swaps and Derivatives Association www.isda.org (ISDA Master Agreement Negotiation Survey

  13. The legal department – metrics Steps to success Business strategic level Budget $ Exposure $ Legal spend vs budget

  14. Offshoring/outsourcing High High Onshore LPO Bristol Paralegal Support Highcomplexity Offshore LPO Lawyer Support Moderatecomplexity Billing rates (£ per hour) Skill set requirements Lowcomplexity Low Low

  15. Working efficiently Project management of legal work Service excellence means that for all client matters, we must be able to say YES to all of the following: • We scoped the matter fully; understood key issues; agreed expected outcome with the client • We agreed a written fee quote, including scope of work and assumptions which must be reasonable • We controlled costs, updated client as appropriate, agreed revised scope of work and constantly revised fee quote • Updated client as to progress • Obtained feedback

  16. Working efficiently – “DealTrack” Project managing your success

  17. Reducing external costs Getting value from your external law firms 20** Panel reduction process 20** New externalpanel Existing firms Implementation of [* *] Legal Model • Communication to business • Create jurisdiction panel firms • Implement instruction protocol to panel firms • Review historical work with non-panel firms • Introduce invoice validation management system and global measuring against budget • Commence use of matter manager for new matters • New matters only to be instructed to panel firms by legal team • Implement value added strategy • General contractor model

  18. Case studies

  19. Case study 1 The DuPont Legal Model “is an integrated approach for managing change within the law department and for continuously improving how legal services are provided to DuPont businesses in terms of quality, cost and efficiency” • Founded on strategic partnering • Requires ongoing re-engineering of work processes • Focus on the bottom line has led to cost effective and client-centred legal services • 350 to 40 law firms in US, UK, Canada and Mexico • Total savings exceed $75 million

  20. Case study 2 To achieve significant cost reduction and improve legal representation Tyco held a competitive tender for its legal needs in EMEA • Gap analysis of internal resources and external needs • Eversheds replaced 285 existing law firms in EMEA and seconded lawyers to Tyco • Legal costs reduced by 30% and Evershedsreappointed after two years

  21. Case study 3 Proving value Demonstrating value of legal team with key metrics? • Case study: FTSE 100 Company • Online business survey with face-to-face interviews. Benchmarking of legal team value to business units, as well as strategies for legal/business protocols • Before • No way of showing team’s value • Under pressure from wider business • How to adapt to needs of business? • After • Financial & Customer validation of team performance • Identified improvements for next stage of evolution Result: Report suitable for sharing with wider business showing legal team value, and identifying areas for improvement

  22. Case study 4 Managingspend Insource v outsource Result: Provision of detailed breakdown of £6m legal spend, enabling benchmarking of internal v external legal spend and convergence programme of legal panel • Case study: Fortune 500 manufacturing multinational Eversheds Consulting was approached to analyse and assess existing legal management and risk and compliance functions over 39 jurisdictions • Before • No processes • no decision criteria • ad hoc • After • sophisticated decision tree • risk/quality/capacity assessment applied to different work areas in different ways – rigidly applied

  23. Case study 5 Reducingspend Managing internal teams • Before • No KPI’s • No MI • No regular meetings • No clear strategy Result: We achieved a 32% reduction in the team caseload as part of the project • Case study: FTSE 50 financial services Engaged on a legal spend and process engineering project – the starting point being the wholesale banking legal team. Eversheds Consulting were responsiblefor delivering process improvements, optimal team structures, data integrityand quality checking, as well asteam KPI’s • After • Focused KPI linked to objectives/strategy • 1:1 and team meetings • Monthly reporting • Clear strategy

  24. The challenge of contract management Getting the value from your contracts • Maximise the value of your in-house legal work • Manage your suppliers effectively • Reduce your risks • Reduce your costs and get full value from your contracts • Make your legal team profitable – recoveries Analysis Negotiation Contract Management Lifecycle Compliance Activation

  25. The profitable legal department Achieving the ultimate goal • How to create a revenue stream • Identification of legitimate claims thatotherwise might be missed • Money on the table which is not picked up • Proactive management of transactions, agreements, patents and other contracts to discover wrongdoings. Egwarranties and indemnities in M&A • Not a Litigation Programme • But needs a cultural change – proactive not reactive

  26. Case study 6 A legal recovery is defined as: “any recoupment in the form of cash (royalty payments, settlements and adjustments), products, services or other quantifiable rights obtained for a company or its affiliates, through the intervention by legal professionals beyond a normal business transaction” • DuPont have recovered $1.6 billion since it started its programme5 years ago

  27. Not simply obtaining a favourable settlement • Capturing value in contracts • 35% outside US DuPont 2009 recoveries by cases • Commercial/Contracts $248.9 million • Intellectual Property $60.4 million • Bankruptcy/Collection, Commercial/Sourcing $16.9 million • Trade/Customs $7 million General Torts, Antitrust, Pioneer • Trade/Antidumping $941 million Solae $659 million • <1%: Insurance $492 million; Tax $240 million; Environment $114 million; Corp. Securities $77 million

  28. Action • Evaluate litigation history and define profit and loss • Implement structured programme between legal,finance and business units • Educate and inform on the possibilities, eg: • Supply contracts • Over-billing • Power cuts • IP/Licensing fees • Establish a programme to assert legal rights • Change the culture • Communicate success

  29. Developed to meet challenges faced by in-house teams International records management Legal spend and legal management Risk andcompliance Environment, health and safety Global corporate secretarial Eversheds Consulting Helping your department to generate income Recoveries

  30. Paul Smith Paul is a Partner, environmental lawyer and litigator and has defended a number of multinational companies over the years in relation to criminal investigations in the UK, Europe and North America. The investigations have ranged from chemical plant explosions, insider dealing, railway disasters and price-fixing to environmental incidents and other major crises. Paul is a recognised expert on law firm partnering and convergence. He began developing this expertise as client partner for DuPont more than ten years ago. In recent years Paul has focused on how the law firm and the global corporate law department can work together effectively across multiple jurisdictions. Paul consults with many global corporate law departments on their structures, processes and practices to derive greater value from outside counsel. He is part of the Eversheds team involved in the Tyco convergence projectin Europe, Middle Eastand Africa, where Tycoused its innovative 'SMARTER' model to consolidate most of its outside legal services from more than 250 law firms across 37 jurisdictions to one: Eversheds. In February 2008, Legal Business magazine honoured Paul Smith as 'Lawyer of the Year', one of the most prestigious awards in the UK. He was awarded for his pioneering work in delivering new approaches to global client relationship management. Paul was also included in 'The Lawyer' magazine's list of the 'Hot 100 Lawyers' for 2008. Paul Smith +44 845 498 4464 paulsmith@eversheds.com

  31. ©Eversheds Consulting 2011. A division of Eversheds LLP.